Health insurance provider Health Net, Inc. announced Thursday it will stop covering medical and health services at six Southern California hospitals run by Tenet Healthcare after contract negotiations broke down.
As a three-year contract came to a close at midnight on Dec. 21, the two companies were unable to agree on reimbursement rates for services necessary to renew the contract. Health Net wanted reimbursement rate increases to be tied to the Consumer Price Index, which currently averages about 3 percent, according to the company. Health Net also wanted Medi-Cal reimbursements to be tied to state and federal funding for the program. Tenet was pushing for higher reimbursement rates.
The move will force thousands of people covered by Health Net to see their doctors or schedule treatments at 10 other available hospitals.
The effected hospitals include Desert Regional Medical Center in Palm Springs, Fountain Valley Hospital and Medical Center, John F. Kennedy Memorial Hospital in Indio, Lakewood Regional Medical Center, Los Alamitos Medical Center and Placentia Linda Hospital.
"The decision to proceed with the termination process was difficult," said Steve Sell, president of Health Net's Western Region Health Plan. "We had no choice, however, as Tenet Healthcare has refused our requests to negotiate a new contract that more accurately reflects current statewide market conditions."
"Our goal is to help preserve affordable benefits for our customers, not pass along inflated health care costs," Sell added.
A spokesman for Tenet Healthcare was not immediately available to comment.
In a statement, Health Net encouraged affected members, employers, brokers, and consultants to call its customer services department at (800) 522- 0088.